Monday, April 27, 2015

In 2013, vehicles in the US achieved an all-time record for fuel economy at 24.1 miles per gallon, which is five miles per gallon more than a decade ago. This increase is set to continue in the decade to come and is projected to save nearly 12 billion barrels of oil by 2025. By then, standards will hit 54.5 miles per gallon.

Demand for finished petroleum products dropped by 10.5% since 2007. The US is consuming a third less oil per dollar of GDP than it was back in 1976, with projections for continued decline. Moreover, BRIC (Brazil, Russia, India and China) economies are collectively the most oil-dependent countries in the world, but are all struggling with economic growth.

Analysts are crediting the initial collapse in the oil price from $110 to $82 from late July to mid-October 96% to a collapse in demand in developed countries. This runs counter to preliminary conclusions the drop was due to an increased supply from the booming hydrofracking industry across much of the Midwestern United States.

The only remedy for the staggering oil market is an increase in demand. But experts see without the massive market the American market contributed to the petroleum sector, it is not expected to rebound any time soon. American oil consumption has been waning overall ever since the late 80's, with spikes here and there. But the new order suggests with the advent of hybrid and completely electric cars, the market will continue to struggle, perhaps forever.

TAGGED AS:

• gas prices
• oil market
• petroleum consumption
• refineries